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GameStop's DeMatteo Urges More Price Cuts, PS2 Reduction 'Wasn't Worth Doing'

GameStop CEO Dan DeMatteo says video game consoles need price cuts to sustain growth -- stating that even a $50 cut wouldn't be enough for the PS3, and that given possible Wii slowdown, Nintendo should also adjust.
GameStop CEO Dan DeMatteo says video game consoles -- particularly the PlayStation 3 and Wii -- need price cuts to sustain growth. DeMatteo joins industry analysts and even the console's most loyal developers in pressing Sony for a PS3 price cut, stating that the $399 retail price is "clearly an issue in this economy." And the exec suggests any PS3 price reductions should be deep, at least $100 in order to be effective: "I don't know that $50 gets you that much," DeMatteo told CNBC. Although Sony recently lowered the price of the PlayStation 2 from $129.99 to $99.99, DeMatteo says the move's too little, too late on Sony's part. "To be honest, it really wasn't worth doing," he says. "If they'd done it earlier, publishers probably would have kept making games for the PS2, but once they've stopped, they've stopped." As for the $250 Wii, the sales slowdown it's seen in Japan alongside significant reductions in its manufacturing costs have driven buzz that Nintendo's console should also see a price cut. Lazard Capital Markets analyst Colin Sebastian recently said that any sluggishness in Wii sales is largely seasonal, but DeMatteo isn't so sure. "I think [demand for] the Wii could slow down to the extent that Nintendo may want to cut the price," he says. DeMatteo also says Nintendo has advised GameStop to "reserve [shelf] space]" for a "Nintendo key property" by year end. At the 2009 Game Developers Conference, Nintendo president Satoru Iwata said that the newest DS installment in the Zelda franchise, Spirit Tracks, would release later this year, but DeMatteo had no details on what sort of product Nintendo is referring to this time.

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